Buying a home

The Truth About FICO Scores & Down Payments

C6F557BA-9A2F-4771-B82D-E1AC28914D22

Interestingly, the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. It seems the main reason why non-homeowners do not own their own homes is because they believe that they cannot afford them. Guess what. The probably can.

There are two major misconceptions when buying a home.

1. Down Payment

Most consumers overestimate the down payment funds needed to qualify for a home loan.

According to a recent survey, 53% of Americans who plan to buy or have already bought a home admit to their concerns about their ability to afford a home in the current market. In addition, 46% are currently unfamiliar with alternative down payment options, and 46% of millennials do not feel confident that they could currently afford a 20% down payment.

The truth is, there are many loans written with down payments of 3% or less!

Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO®Scores

Most people believe they need excellent credit to buy a home, with many thinking a “good credit score” is over 780. In actuality, the average FICO® scores for approved conventional and FHA mortgages are much lower.

The average conventional loan closed in May had a credit score of 753, while FHA mortgages closed with an average score of 676. The average across all loans closed in May was 724.

If you’re considering buying a home but unsure if you’re able to, give me a call. I’m happy to put you in touch with a reputable lender who can help you understand your true options today. 301-320-8349 or 703-963-0142. Email works too: robyn@robynporter.com

3 replies »

  1. Reblogged this on Kentucky First Time Home Buyer Loan Programs for FHA, VA, KHC, USDA, RHS, Fannie Mae Home Mortgage Loans in Kentucky for 2018 and commented:
    Most people believe they need excellent credit to buy a home, with many thinking a “good credit score” is over 780. In actuality, the average FICO® scores for approved conventional and FHA mortgages are much lower.

    The average conventional loan closed in May had a credit score of 753, while FHA mortgages closed with an average score of 676. The average across all loans closed in May was 724.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s